Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Darden (NYSE:DRI) and its peers.

Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.

The 12 sit-down dining stocks we track reported a mixed Q3. As a group, revenues missed analysts’ consensus estimates by 0.9%.

In light of this news, share prices of the companies have held steady as they are up 1.6% on average since the latest earnings results.

Darden (NYSE:DRI)

Started in 1968 as the famous seafood joint, Red Lobster, Darden (NYSE:DRI) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.

Darden reported revenues of $2.76 billion, flat year on year. This print fell short of analysts’ expectations by 1.5%. Overall, it was a slower quarter for the company with a miss of analysts’ EBITDA estimates.

"We operate in a very dynamic, competitive industry and we have proven we can successfully navigate challenging environments due to our strategy," said Darden President & CEO Rick Cardenas.

Interestingly, the stock is up 5.2% since reporting and currently trades at $167.41.

Read our full report on Darden here, it’s free.

Best Q3: Brinker International (NYSE:EAT)

Founded by Norman Brinker in Dallas, Texas, Brinker International (NYSE:EAT) is a casual restaurant chain that operates under the Chili’s, Maggiano’s Little Italy, and It’s Just Wings banners.

Brinker International reported revenues of $1.14 billion, up 12.5% year on year, outperforming analysts’ expectations by 3.4%. The business had a stunning quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ same-store sales estimates.

Brinker International delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 33.4% since reporting. It currently trades at $129.74.

Is now the time to buy Brinker International? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Denny's (NASDAQ:DENN)

Open around the clock, Denny’s (NASDAQ:DENN) is a chain of diner restaurants serving breakfast and traditional American fare.

Denny's reported revenues of $111.8 million, down 2.1% year on year, falling short of analysts’ expectations by 3.2%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.

As expected, the stock is down 3.6% since the results and currently trades at $6.39.

Read our full analysis of Denny’s results here.

The Cheesecake Factory (NASDAQ:CAKE)

Celebrated for its delicious (and free) brown bread, gigantic portions, and delectable desserts, Cheesecake Factory (NASDAQ:CAKE) is an iconic American restaurant chain that also owns and operates a portfolio of separate restaurant brands.

The Cheesecake Factory reported revenues of $865.5 million, up 4.2% year on year. This print was in line with analysts’ expectations. It was a strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and a decent beat of analysts’ EPS estimates.

The stock is up 16.9% since reporting and currently trades at $50.09.

Read our full, actionable report on The Cheesecake Factory here, it’s free.

Red Robin (NASDAQ:RRGB)

Known for its bottomless steak fries, Red Robin (NASDAQ:RRGB) is a chain of casual restaurants specializing in burgers and general American fare.

Red Robin reported revenues of $274.6 million, down 1.1% year on year. This print topped analysts’ expectations by 1.4%. More broadly, it was a softer quarter as it recorded full-year EBITDA guidance missing analysts’ expectations.

The stock is down 11.7% since reporting and currently trades at $5.42.

Read our full, actionable report on Red Robin here, it’s free.

Market Update

Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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